Finance Minister Mihaly Varga – Photo: MTI

Finance Minister: GDP expected at 5 percent, deficit target at 4.9 percent in 2022

The finance ministry is calculating with a GDP growth over 5 percent next year, making it possible to reduce the budget deficit target to 4.9 percent, Finance Minister Mihaly Varga said on Friday.

The ministry and the Government Debt Management Agency (AKK) presented a plan calculating a net financing requirement for 2022 of 3,153 billion forints (EUR 8.5bn), covered by 2,663 billion forints in bonds and by drawing on 489 billion forints of 2021 liquidity reserves, he said.

Funding will be covered by issuance of 1,000 billion forints in forint bonds, 1,000 billion in retail bonds and 406 billion forints in foreign currency bonds, he said. In addition, 258 billion forints of treasury bills will be issued to finance the deficit, he said.

In order to push back the maturity date of the debt and to improve its structure, the government will renew successful programmes such as the green bond framework, retail bonds sales and swap auctions, he said.

Varga said budget financing was stable and covered government measures such as family tax rebates, personal income tax exemptions for those under 25, the 13-month pension, wage increases, and the 750 billion forint reduction in taxes on labour.

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